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  • Covid-19 impact on budgets

    Many countries have increased spending (debt) due to the current health crisis. With several nations (just using this as an example of the overall situation) in the early stages of big ship and aircraft programs, will the governments be cutting back on defense spending long term? I'm thinking of big projects like the UK, Australia and Canada with their Type 26 and a multitude of countries with the F35. I don't mean so much as them being cancelled as downsized.

  • #2
    I haven't really seen much talk about cutting budgets or austerity, rather just taking a lot more debt. GDP is going to plummet across the board for sure as well. The impact of that is probably going to felt in two-three years, but for now the governments seem to be mostly interested in making sure everything doesn't collapse.
    Wisdom is personal

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    • #3
      There has been a recent article about this scenario as it slowly unravels... with another article to follow next week.
      Then the virus arrived, with the associated hit to the economy and consequently to government revenue. Nobody knows how big a hit it will be, or how long it will last for, or what its impact on the defence budget will be. Nevertheless, in early April the finance minister implied that the government was sticking to the white paper’s funding lineregardless of changes to GDP:
      The Government agreed back in the 2016 Defence White Paper that there would be no further adjustments to funding as a result of changes in Australia’s GDP growth estimates.

      This was to provide funding certainty in the context of a massive investment program and to avoid the need to have to regularly adjust Defence’s force structure plans.

      As part of the annual Budget processes, a 10-year Defence funding profile is agreed by Government which is designed to provide planning certainty to Defence.
      https://www.aspistrategist.org.au/au...re-are-we-now/
      "In modern war... you will die like a dog for no good reason."
      Ernest Hemingway.

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      • #4
        That's a good sign for Australia.

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        • #5
          I really don't see how Australia can afford to do anything less. The US has been in a slow decline. The Chinese are asserting their power more every day, and seeking to assert some economic, political, and diplomatic control in Aus proper. If Australia doesn't look well to its own strength, they could find themselves in a weak position in the future.
          Tacitos, Satrap of Kyrene

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          • #6
            Originally posted by TacCovert4 View Post
            I really don't see how Australia can afford to do anything less. The US has been in a slow decline. The Chinese are asserting their power more every day, and seeking to assert some economic, political, and diplomatic control in Aus proper. If Australia doesn't look well to its own strength, they could find themselves in a weak position in the future.
            Regrettably, I agree. A few weeks ago, I had a thought comparing today to the 1930s. The EU is the France of the 30s, we're Great Britain and China is us. IOW--the EU thinks they're strong, but are a paper tiger. We're (like you said), strong but in a slow decline. China is like we were, the potential superpower, who hasn't had a chance to prove itself, yet.

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            • #7
              Originally posted by johns624 View Post

              Regrettably, I agree. A few weeks ago, I had a thought comparing today to the 1930s. The EU is the France of the 30s, we're Great Britain and China is us. IOW--the EU thinks they're strong, but are a paper tiger. We're (like you said), strong but in a slow decline. China is like we were, the potential superpower, who hasn't had a chance to prove itself, yet.
              I would agree with that sentiment. Only that the EU is worse off than France was because France did have the strength, just prepared for the wrong war. The EU neither has the strength or preparation.
              Tacitos, Satrap of Kyrene

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              • #8


                Some of the big military projects have multiplier effects within the economy, one example was the Collins class before it commenced. It was pointed out that the wages going back into government coffers and extra cash flowing through the economy was hard to ignore.
                As to how long the big projects can be sustained in the current climate is the big unknown... the new Barracuda class deal could see a reduced number of subs ordered if the current climate continues to drain the finances in the future.
                China is starting throwing tariffs at us because Prime Minister Scott Morrison is seeking to build an international coalition to give the World Health Organisation (WHO) — or another body — powers equivalent to those of a weapons inspector to avoid another catastrophic pandemic. If this continues then our export revenue will be hit until we find other markets.

                It is interesting though, China has only (for now) asserted control on islands down in the South China Sea, but other contested islands like the Senkaku Islands, China has only made lots of diplomatic noise about it. Plus escalating foreign aircraft intercepts. https://www.mod.go.jp/js/Press/press...0170413_02.pdf
                Having powerful navies from Sth Korea and Japan certainly keeps China in check within her own region.

                One interesting topic, for the entire military budget of your home country... if 10% was to be slashed, where would you make the cuts?
                Last edited by Achtung Baby; 18 May 20, 20:08.
                "In modern war... you will die like a dog for no good reason."
                Ernest Hemingway.

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                • #9
                  More from Australia.

                  A parliamentary committee has been told a key milestone on the Future Submarine program has been pushed back, and the eventual cost of building the new fleet could reach $90 billion.

                  Meanwhile, Australia's next batch of Joint Strike Fighter aircraft could also be delayed after US defence company Lockheed Martin foreshadowed a production slowdown for three months due to the coronavirus impact.
                  https://www.abc.net.au/news/2020-05-...35GVlbSEgGjEgg
                  "In modern war... you will die like a dog for no good reason."
                  Ernest Hemingway.

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